While most in the United States were celebrating the Fourth
of July holiday, a Russian immigrant living in New Jersey was
being held on federal charges of stealing secret computer
trading codes from a major New York-based financial
institution.

Authorities did not identify the firm, but sources say the
institution is none other than Goldman Sachs (GS.N: Cotización).

The charges, if proven, are significant because the codes
that the accused, Sergey Aleynikov, tried to steal are the
secret sauce to Goldman's automated stock and commodities
trading business.

Federal authorities contend the computer codes and
related-trading files that Aleynikov uploaded to a German-based
website help this major financial institution generate millions
of dollars in profits each year.

The platform is one of the things that gives Goldman an
advantage over the competition when it comes to the rapid-fire
trading of stocks and commodities. Federal authorities say the
platform quickly processes rapid developments in the markets
and using secret mathematical formulas, allows the firm to make
highly-profitable automated trades.

The criminal case has the potential to shed a light on the
inner workings of an important profit center for Goldman and
other Wall Street firms. The charges also raise serious
questions about the safeguards that Wall Street firms deploy to
protect these costly-to-build proprietary trading systems.
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